Health care system evolution

Health Care System Evolution

The state of health care in the United States is perhaps nowhere better exemplified than in the social medical schemes known as Medicare and Medicaid. These two schemes have more or less developed together since they have been signed into law during 1965. Since then, they have been subject to much controversy, political issues, and public outcry, mainly as a result of escalating costs and the perception that government and medical establishments are not particularly concerned over serving the needs of the public.

The 1965 Medicare and Medicaid bill was enacted in order to finally silence decades of political controversy surrounding health care coverage, according to Paul S. Boyer (2001). The passage of the Social Security Act in 1935 began the trouble by omitting any health insurance provisions. Although not for lack of trying, repeatedly failed to establish a comprehensive health insurance plan over the two following decades. As a result, reformers attempted to establish limited plans to address health care for those in most need.

The 1940s for example saw Congress and President Truman involved in several efforts to provide national health insurance (Noonan, 2009). With Republican support, and also that of Congressman Richard Nixon, a bill was signed in 1947, which was to provide government subsidies for a private nonprofit insurance system. The premiums of this system would be scaled according to an individual's income level. In 1950, President Truman signed legislation that would provide federal grants to state payments for medical care received by the poor. This legislation was one of the forerunners to Medicaid.

During the early 1950s, according to Noonan (2009), comprehensive health coverage underwent further evolution: it all but vanished from the political agenda. This was mainly the result of employer-sponsored insurance and the conservatism paradigm of the time. However, the issue would not die a quiet death, and later during the decade pressure once again increased to provide some relief effort for the aged, who were often faced with enormous medical bills. Indeed, these bills were among the leading causes of poverty among this sector of society, because the elderly could not purchase medical insurance.

In 1957, health insurance advocates for the elderly responded to the problem in an attempt to pass the Forand Bill with the help of Representative Forand, which would provide health care for the elderly (Boyer, 2001). However, this bill did not win passage, although it does have the reputation of being the direct ancestor to Medicare. Three years later, Medicare became part of President John F. Kennedy's national agenda. The bill was also sponsored in Congress by Representative Cecil King and Senator Clinton Anderson.

Following several hearings in the House of Senate, the Democratic victory in the 1964 elections resulted in the scheme becoming President Johnson's top priority. President Lyndon B. Johnson then signed the Medicare and Medicaid Bill into law at the Truman Library in Indolence, Missouri, during 31 July 1965 (Boyer, 2001). The location was significant, as it was chosen in honor of Harry S. Truman, the former president who worked in support of national health insurance. Medicare was attached to the 1935 Social Security Act, which would have its thirtieth anniversary only two weeks after the 1965 bill was signed.

In 1964, the Arkansas Democrat Wilbur Mills, also the House Ways and Means Committee chairman, assembled the three parts that would constitute the Medicare and Medicaid Bill. The first part consisted in Medicare, which was an expansion of the old-age pension program within the Social Security Act. Employees would contribute to a Medicare trust fund by means of deductions from their salary. These funds would then be used towards Social Security benefits and hospital care coverage for eligible pensioners. Some surgical care and nursing home reimbursements would also be included in Medicare benefits. Originally, this included 120 days of hospital benefits and 120 days of nursing-home benefits. General revenue funds from the program would also be applied towards hospital construction equipment purchase and grants to teaching hospitals.

The second part of the law, also known as Part B, concerned physician visits. Initially, Part B was known as Eldercare, the American Medial Association's (AMA) alternative to Medicare. Mills however reformed it to become an optional part of the Medicare program and legislation. This is an option that pensioners could choose upon retirement. To receive benefits under Part B, deductions were made from recipients' Social Security checks.

The third part of the bill was Medicaid. The idea for this scheme originated during the early part of the 1960s. It was created as an alternative for the compulsory heath insurance plan suggested by the Johnson alternative. The scheme would be funded from general tax revenue, and focused specifically upon the health care needs of the poor and other qualifying individuals. Such qualifying persons included welfare recipients, the blind or otherwise disabled and the low-income elderly.

Although much better than no health care provision at all, the new bill began its career filled with trouble. After its enactment, periodic modifications were made mostly in an attempt to control the costs necessary to maintain the schemes. In 1971 and 1974, for example, standards and costs were reviewed to eliminate duplication of equipment and hospitals. In 1983, according to Boyer (1971), charges for medical procedures were revised and standardized.

Despite continual efforts by state and federal agencies, controlling fraud and abuse within the system remained a significant challenge. By the 1980s, discussion centered around the long-term needs of the elderly, medical catastrophes and how to cover these, as well as ways in which the Medicare system could be maintained for baby boomers who would reach retirement age. In addition health maintenance organizations were introduced as an option for Medicare and Medicaid recipients.

Despite the best governmental efforts surrounding the schemes, the end of the 20th century found 44 million Americans uninsured. In addition, problems within the schemes focused on reimbursements to Medicare patients for pharmaceuticals.

Boyer (2001) notes that pressure from the bush administration and the American Association of Retired Persons resulted in limited prescription drug benefits for Older Americans under the Medicare system, which would begin in 2006. These benefits have been widely criticized for the unsustainability.